What's Going to Happen in Recruiting in 2014?
By Debbie Fledderjohann
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How is 2014 going for you so far? Are your New Year's resolutions still alive and well? As you evaluate last year and the first month of the New Year, here are some predictions for what we think will be big in recruiting and staffing in 2014.
These predictions, based off our own contract placement statistics, industry data, and conversations with recruiters, may help you determine what to do as you plan the rest of your year.
5 Recruiting Trends To Watch Out For
- More growth in contract staffing. Coming off a record-breaking 2013, there is no end in sight to contract staffing's growth. CareerBuilder reports that 42% of employers plan to utilize contract workers, and we are seeing signs of growth in our own placement statistics. More direct hire recruiters made their first contract placements through our back-office in 2013, and others have contacted us about adding contract staffing services to their business models in 2014. We are noticing that companies are increasingly using contract staffing as a permanent business strategy. As a result, we are seeing a new blended workforce model emerge where companies maintain a small core of direct hires supported by a larger outer ring of contractors.
- Companies are hiring, but still cautious. Many employment experts are predicting a good year for hiring based on some positive developments in the economy. For starters, the unemployment rate is at its lowest rate since 2008. Additionally, job openings hit their highest level since March 2008 at the end of last year as overall hiring increased 5.2% in 2013. Despite these positive signs, employers are still practicing caution, particularly with another debt ceiling standoff starting. This is a major reason companies continue to turn to contractors. They can complete projects and meet critical deadlines without permanently adding to their overhead just in case the squabbles in Washington put a crimp on the U.S. economy.
- In-Demand STEM candidates. Despite uncertainty, hiring is hot in the growing STEM (Science, Technology, Engineering, and Math) arena. Due to the competition for talent in this area, recruiters focusing on these niches will be in demand as well. Recruiters who can provide contractors will be the most sought after because a lot of the work is project-oriented. Candidates in these industries also often prefer contract staffing due to the flexibility and higher earning potential contract work offers.
- Staffing concerns due to Obamacare. Commpanies got a reprieve from the employer mandate provision of the Affordable Care Act (ACA) when it was delayed until 2015. But with 2015 now on the horizon, employers will once again have to determine how to handle the mandate. Under the employer mandate, companies with 50 or more full-time or full-time equivalent employees will have to provide healthcare coverage for those employees. Will they provide the coverage as required or pay the penalties? Or will they try to somehow reduce their full-time workforces below the 50-employee threshold? Some companies considering the last option may use contractors to avoid the employer mandate. As W-2 employees of a staffing firm or a contract staffing back-office, contractors don’t count toward a company’s 50-employee threshold. Instead, the staffing firm or back-office is responsible for Obamacare-compliance for those contractors.
- Continued worker classification enforcement. The government’s continued scrutiny of independent contractor (IC) classification will remain an important factor for employers and recruiters as federal and state agencies find new ways to recoup lost tax revenues. The latest development is that the Department of Labor and a number of states are now working with the IRS to target companies who are misclassifying workers who should be W-2 employees as 1099 ICs. Be sure to warn your clients of this and offer to convert their ICs to contractors who are W-2 employees of a contract staffing back-office.
The bottom line? We believe 2014 will be a good year for recruiters. But if you are really trying to improve on last year and last month, you stand the best chance for success if you add contract staffing to your business model.
About the Author: Debbie Fledderjohann is President of Top Echelon Contracting, Inc., the Recruiter's Back-Office Solution. Established in 1992, TEC helps recruiters offer contract staffing by becoming the W-2 employer of their contractors. As such, they handle the financial, administrative, and legal details, including payroll processing and funding, employment paperwork, tax withholdings, Workers' Compensation, Unemployment, legal contracts, background checks, invoicing and collections, and more. They do business in 49 states and specialize in professional, technical, and healthcare placements. You can follow Debbie on @dfledderjohann as well as on LinkedIn, Google+, and Twitter.
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